So SIRI had $359,657,000 in cash on hand at the end of Q3. There is the possibility of the Loral credit line of 100 million (if the stock can get to .31) and also the GM credit line of 150 million, isn't there? Q4 has traditionally been their strongest quarter and FCF positive. If you consider the extra revenue from the new "Best Of" packages and the accelerating cost savings from the synergies of the newly merged company, this Q4 should be no different. So it seems to me that even IF they couldn't get any financing at all for the Feb. '09 debt ( I think they can BTW), they would have enough cash on hand to take that 210 million out. Also, keep in mind what Mel Karmazin said during the Q3 conference call regarding this...

"Moving on to our debt maturities; the company is actively in discussion with both the holders of our existing debt, as well as a significant number of additional lenders who are considering putting new money in to SIRIUS XM.
Diligence is underway by these institutions. These lenders understand that the refinancing issues are macroeconomic in nature and not related to any operating failure on the part of SIRIUS XM. The banks we have been working with believe in our business plan and support the company. We are especially focused on what was the $300 million SIRIUS February '09 maturity. That $300 million has now been reduced to $210 million using 3(a) (9), and we are hopeful and confident of shortly announcing refinancing of that trench. There is also May '09 and 12/09 XM debt, that must be refinanced and part of our discussions focused on these maturities as well. We will continue to keep you informed on our progress, and would like to get this issue behind us as soon as possible."

"The merger has made us a stronger company. We are confident that we will work our way through the debt refinancing that needs to be done. I believe this economic environment helps to demonstrate the real value of our unique radio subscription business model."

So Mel also said in the Q3 CC that they are also in talks about the May 5th, '09 debt of 350 million (XM’s $250 million revolver and $100 million term loan). It is likely that they will be able to get these extended and refinanced with a possible partial cash payment also possible. They are now predicting 50 million less cash outflow for '08 and no cash burn for '09 with $300 million of EBITDA. This could also be conservative if the "Best Of" adoption rate and cost savings from the merger accelerate - not to mention if car sales rebound at all from these horrid levels.

"The adjusted EBITDA excluding the merger cost improved over 90% from last year. Obviously, the extraordinary synergies that we have identified, puts us on the clear path for SIRIUS XM delivering positive EBITDA in 2009.

As a result of continued financial discipline and third quarter performance, we are on track to have a smaller than previously forecasted EBITDA loss of $300 million versus $350 million for the full year of '08.

We have been asked when will we be EBITDA positive and not be a user of cash. Well, the answer is now very clear. It is in 2009 when we will have over $300 million of EBITDA. And after all cash expenses, including satellite expenditures, we will not have net cash outflow for the full year '09. And this positive trend will continue in subsequent years."

With the share price so low, using equity for debt is not desirable at all at this point. I believe that when the financing and payment of the Feb '09 and May '09 debt is announced the stock will recover, making it more of a viable option if needed for the Dec. '09 debt. The company and the credit market should be in much better shape by then....

The bottom line is that there is no way in hell that SIRI will be announcing bankruptcy anytime soon. They have enough money to pay the Feb.'09 debt NOW and will have even more cash on hand by the time it is due - coming out of a strong Q4. It is also very likely that the 350 million in May '09 debt can and will be refinanced or extended with a partial payment also possible (they will have positive cash flow in '09 of "over 300 million" according to Mel in the Q3 CC). That leaves the 433 million due in Dec.'09 (XM’s $33 million convertible discount notes and $400 million 10% convertible notes). You would think that if the Feb.'09 and May'09 debt is taken care of this last bit should be able to be taken care of also. The Dec.'09 debt comes due after over a full year of synergies from the merger and in the midst of their traditionally strong Q4. The company and the market should be in much better shape by then....

Look at it this way....

993 million in total '09 debt due

- 360 million in cash on hand

- Q4 FCF influx?

- Over 300 million in '09 FCF - EBITDA

- 150 million GM credit line?

- 100 million Loral credit line?

- MLB escrow $$$?

What do you think? Am I missing something? Tell me under what scenario the company could possibly go bankrupt with their cash on hand and existing credit facilities available to them....

Loral can only be used with a market cap of over 1 billion. If they use the Credit Line, Loral goes penniless. Not a good way to treat a coworker...
GM Credit line can only be used for GM payments (though we dont know exactly how much those are per quarter), and they are on the verge of bankruptcy themselves, also not a good way to treat a coworker. If they declair chapter whatever, that credit line closes immediately anyways.

That being said, I dont think they need those two credit lines to stave off BK. My primary (and only real concern) is how much cash burn they will have in Q1 and Q2. This is where either credit line could greatly help... gives them another 100-150 million to work with.

THAT being said, I don't think Q2 will be much to worry about in the way of FCF... traditionally, Q2 has been better than Q3, and since Q3 was "nearly breakeven" this year, I think Q2 will have mnimal - if any - cash burn.

Newman, the GM facility is gone. The Loral facility can be used for current payments, as I understand it -- but cannot be used to BORROW money from payments already made, if the MC is under $1 billion. As I understand it, they can still use the facilty in place of making current payments - though I could be wrong about that. Regardless, the GM facility is caput.

homer: You are probably right, as no one has ever proved you wrong, but I thought that during the merger, the GM credit line was repayed and was ammended t keep it in place in the case of a merger. What happened to that?

I agree with Newman here. I seem to recall (and will try to find) when the GM facility was paid off, with the understanding that the new debt was available. Granted, given their dire circumstance, I doubt GM is giving anyone money.

Assuming all debt is refinanced and everything that has been said by management was in fact just low ball estimates, would anyone care to speculate on a realistic pps for this date next year?

This is not a realistic question. But I will answer anyway.

$0.00

There may not be a Sirius next year. Think about it, how in the world will a company get its loan refinanced if it is losing money and the credit market is frozen ?

Even if it starts making money, the credit market is frozen !!! They have not been able to thaw it !!!

Let me put this in perspective, I, Siriusowner, buy a house with a mortgage, right ? Then, all of the sudden I get demoted and my income becomes less and my cashflow negative, in other words, now I spend more that what I earn. Would you refinance my home so that I can now pay you instead of the previous lender even if you had negative cashflow also ? Where would you get the money from ?